Its formation was encouraged by a former president of National Union of Students in England, Ralph Nunn May, who was touring Canada as a member of the Imperial Debating Team.
Paul Axelrod, professor and Dean of the Faculty of Education at York University, asserts NFCUS had been created amongst a common desire for peace and international harmony after the carnage and collective trauma experienced as a result of the First World War.
Initially NFCUS resolved to "promote national unity" through campus cooperation and to facilitate the exchange of information on student concerns.
It was not uncommon for editors of newspapers and student councilors to lose their positions after criticizing the university, government, or the dominant order.
In Nigel Moses' Ph.D. Dissertation, he suggests that the influx of veterans with working class origins is related to the re-emergence of NFCUS in 1946–1947.
By the mid-1950s, with university enrollment down which resulted in low funds, student councils pulled out of NFCUS, putting its existence in danger.
As a result of these efforts, NFCUS was able to hire more staff, balance its budget, and engage in government lobbying with respect to funding for universities.
It soon became apparent to NFCUS delegates to IUS that the sympathies of its members were toward the Soviet Union and against continued global capitalist expansion.
Drawing mainly from the work of Joel Kotek and Karen Paget (2003), Moses describes how the ISC was created under the stewardship of the CIA mainly to undermine the Soviet-influenced IUS which was active in anticolonial national movements and promoting Soviet communism in general.
NFCUS became embroiled in a cold war struggle for the hearts and minds of the world's youth leaders; the Soviets, and soon after, the Americans, reasoned (correctly) that national student organizations were powerful social agents of state formation.
So governments on both sides of the Iron Curtain strove to cultivate the political sympathies and support of student leaders internationally – as well, collect intelligence on them.
The Soviets hoped to gain the support of the leaders of newly liberated former colonies; the US needed a foil to stop this, and thus the ISC was created.
For example, Moses documents how starting in the early 1950s, delegates of the US National Student Association (CIA operatives), would regularly attend and formally and informally address NFCUS meetings and seminars.
However, Moses's work raises more questions than it answers: it is not clear for example how effective the US's cultural cold war offensive was on the minds of Canadians throughout the 1950s until 1967, when the NSA-CIA link was revealed in Ramparts magazine.
Also in 1962, Quebec students began to organize themselves into the Union générale des étudiants du Québec (UGEQ), which caused considerable distress among members of the NFCUS.
CUS also became a French and English organization, instituted a bi-national veto in its constitution, and adopted an agreement to cease lobbying the federal government.
However, by 1964, this arrangement fell apart and many of Quebec's universities pulled out of CUS in order to join the UGEQ, which had been officially created that year.
Quebec students were more interested in provincial politics and felt CUS' bias towards lobbying of the federal government conflicted with their nationalist orientation.
Individual student councils pointed to progressive tax reform, which would pay for post-secondary education and make tuition fees redundant.
New Left politics, the war in Vietnam, Students for a Democratic Society, and the black power movement had influenced leaders in the CUS.